Lets talk first about Employee Retention Credit Faqs :
Our group here what do these people doing everybody in this room is helping teach people about ERC and uh constantly supply a gorgeous breakfast and have people really learn more about the program we need to head to the space where we have the ability to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I mean you know if you just start to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean think about how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
receive this you know the check is opted for sure and that’s when they pay so they don’t pay anything until they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their checking account and they can really trust Wonder trust that the process has been finished and the number of you believe you have actually processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you require you need experts on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re discussing something really crucial today the worker retention credit which the majority of you have actually never heard of I certainly hadn’t become aware of it till very recently and learned a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call your bank manager and state provide me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund okay go on sorry I just have to make sure we got that point I indicate that’s a big distinction a loan versus money cash I like money cash that’s what we’re discussing fine and the other loans are done so we’re sitting here in 2023 and the eidl is over the PPP is over and the only one left from the original cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s staff member retention credit that individual needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you had to have owned a company but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wished to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of money it is now there’s a caveat here the PPP cash would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big clearly now the big question is why does no one know about this since appearance when I first became aware of this when I first satisfied Josh you know I have actually got great deals of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not think it due to the fact that I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them wisely to survive during the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my political leader pals Governor Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one know about the worker retention credit you know what’s fascinating you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was turmoil due to the fact that remember in the initial cares act you might not do both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually she or he’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my firm Kevin has actually stayed in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big business customers have worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose company is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. When the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying salaries varies by whether a company had, typically, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing assistance normally provide knowledge and support to assist companies browse the complicated process of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Faqs
Eligibility Assessment: These companies will assess your service’s eligibility for the ERC based upon factors such as your industry, income, and operations. They can help figure out if you satisfy the requirements for the credit and determine the optimum credit quantity you can claim.
Documents and Calculation: ERC filing services will help in collecting the required paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit quantity based upon eligible earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your past payroll records and financials to identify possible chances for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the required kinds and paperwork in your place. This consists of finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have developed over time. These companies remain updated with the current changes and guarantee that your filings adhere to the most existing standards. They can likewise supply ongoing assistance if the IRS requests extra details or performs an audit related to your ERC claim.
It is very important to research and vet any company using ERC filing support to ensure their reliability and proficiency. Look for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who offer ERC filing support.
Remember that while these business can provide valuable help, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate services to keep and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, employers need to satisfy one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of qualified earnings paid to workers, consisting of specific health insurance expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. However, the same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, allowing qualified employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Type 941. If the credit surpasses the amount of work taxes owed, the excess can be reimbursed to the company.
It is essential to note that the ERC arrangements and eligibility criteria have actually developed gradually. The very best strategy is to speak with a tax professional or visit the main IRS site for the most current and comprehensive details regarding the ERC, including any current legal modifications or updates.
To qualify for the ERC, an organization should meet one of the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and businesses that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes finishing the required types and including the credit on your employment tax return (usually Form 941). The exact time it requires to process the credit can vary based on several elements, including the intricacy of your organization and the work of the IRS. It’s suggested to speak with a tax professional for assistance specific to your situation.
There are several companies that can help with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some well-known business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and contact these business straight to inquire about their charges and services.
Please keep in mind that the details provided here is based on basic understanding and might not reflect the most recent updates or changes to the ERC. It’s important to talk to a tax expert or go to the main internal revenue service website for the most current and precise details concerning eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on salaries paid to all workers whether they in fact worked or not. In other words, even if the.
staff members worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted just for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply money payments but likewise a portion of the cost of employer.
provided health care. Employee Retention Credit Faqs
Employers can be right away reimbursed for the credit by minimizing the amount of payroll taxes they.